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Employment and Workplace Relations Legislation Amendment (Welfare to Work and Vocational Rehabilitation Services) Bill 2006
WARNING:
This Digest was prepared for debate. It reflects the legislation as introduced
and does not canvass subsequent amendments. This Digest does not have
any official legal status. Other sources should be consulted to determine
the subsequent official status of the Bill.
CONTENTS
Passage History
Purpose
Background
Main Provisions
Endnotes
Contact Officer & Copyright Details
Employment and Workplace Relations Legislation Amendment (Welfare to Work and Vocational Rehabilitation Services) Bill 2006
Date introduced: 7 December 2006
House: House of Representatives
Portfolio: Employment and Workplace Relations
Commencement:
Royal Assent except for items 1–5 and 8–16 of Schedule
1,
which commence on 1 July 2007.
To amend the Disability Services Act 1986 to allow for the introduction of a contestable rehabilitation-services market from July 2007, and to make a number of minor changes to the Social Security Law.
The Employment and Workplace Relations Legislation Amendment (Welfare to Work and Other Measures) Act 2005 amended subsection 20(1) of the Disability Services Act 1986 (DSA) so that rehabilitation services could be provided in a much more flexible way than had applied in the past. The old section required rehabilitation to produce a vocational result. The new section provides for rehabilitation to be provided if it would result in the person having a substantially increased capacity to
The former Commonwealth Rehabilitation Service, now known as CRS Australia, has for a long time used the old prescriptive direction in subsection 20(1) of the DSA to determine the allocation of rehabilitation assistance. This assistance has been targeted at individuals who will realise a vocational outcome by way of rehabilitation. However, this interpretation by the CRS has been quite literal, often providing rehabilitation only where it is assessed that the person would realise a job outcome from rehabilitation alone. This may be very appropriate in cases where the person has a job to return to, or has very current labour-market skills and needs rehabilitation assistance alone to return to work. However, most of the income-support recipients on Disability Support Pension (DSP) (and other income-support payments) who have the potential to benefit from rehabilitation, do not have a job to return to or current labour-market skills.
While the CRS was not providing these persons with rehabilitation, they were also missing out on vocational-skills-enhancement processes under various government jobseeker-assistance programs, such as Working Nation and today the Job Network. This was because these persons required rehabilitation before vocational assistance could benefit them. Many people on income-support payments (DSP and other payments) who had a medical condition affecting their work capacity, but who could benefit from rehabilitation and vocational training, fell through the cracks and were left behind.
The process of opening up the provision of rehabilitation services to the private sector commenced in May 2006 when Minister Stone announced that:
“The Australian Government wants to ensure that people who require work-based rehabilitation have a greater choice of rehabilitation providers to assist them to re-enter the workforce,” Dr Stone said. “From 1 July 2007 work-focussed rehabilitation services for up to 22,000 people will be provided by the private sector through an open tender process,” she said….
“Offering choice in vocational rehabilitation services means individuals will go to the service that best suits them and the resulting competition will promote innovation, resulting in better ways to help people overcome disability and rejoin the workforce as soon as possible,” Dr Stone said.(1)
An industry alert was issued on 27 June 2006 to tell potential tenderers about the new arrangements.(2) An exposure draft of the purchasing arrangements for 2007–09 followed on 11 August 2006(3) and the request for tenders was issued on 27 September 2006.(4)
CRS Australia currently provides services at 170 sites around Australia. Under the new arrangements the number of sites offering services is expected to increase to about 400.(5) Up to 56,000 people are expected to benefit from rehabilitation services each year under the new arrangements during 2007–09.(6) Forty per cent of this business will be open for tender to the private sector.(7)
The new places are to provide assistance to those people with part-time participation requirements as a result of the recent welfare-to-work reforms. The Welfare-to-Work package included $192 million for vocational rehabilitation services for this group over the three years to June 2009. Private-sector providers will deliver up to fifty per cent of the services to this group, but only up to twenty per cent of services to income-support recipients with no activity-test requirements or full-time activity-test requirements.(8)
This Bill amends the DSA to allow rehabilitation services to be provided by private-sector services. The Secretary will no longer be required to approve each individual rehabilitation program. This function was delegated to CRS Australia. In a contestable market where CRS Australia is one of a number of providers, such an arrangement would be inappropriate. Similarly, changes are made to allow the new providers to undertake cost-recovery work, rather than leaving it all in the hands of CRS Australia.
Other amendments provide for:
The Senate Employment, Workplace Relations and Education Committee is undertaking an inquiry into the Bill, and its report is due by 20 February 2007. The submissions are available at: http://www.aph.gov.au/Senate/committee/eet_ctte/wr_workchoices06/submissions/sublist.htm.
Issues raised in submissions include:
Entitlement for Pensioner Education Supplement (PES) continues for sole parents and people with disabilities who move from Parenting Payment or Disability Support Pension (DSP) to Newstart Allowance (NSA) or Youth Allowance (YA) as a result of the Welfare–to-Work reforms that commenced in July 2006. This Bill adjusts this arrangement so that DSP recipients who are moved to NSA or YA after a review will only retain PES if it was their first review after 1 July 2006. This appears to be a significant change for this group, and it has attracted criticism in a number of the submissions to the Senate Committee examining the Bill.(12) The change would reduce the financial support for this group of people with disabilities part of the way through their course of study and potentially affect their ability to complete those studies.
The bill also seeks to allow recovery of Financial Case Management debts by deductions from income-support payments. The DEWR submission to the committee explains the change as follows:
Under the Welfare to Work legislation, people in certain circumstances who are subject to an 8-week non payment period, will receive financial case management. This may include receiving funds to pay bills and to buy essential items. In the situation where funds were provided incorrectly, such as because of being given false information, it may be appropriate to raise a debt. Under the current legislation it is possible for debts to be raised, but it is not possible for them to be recovered in the usual way, that is through income support payment deductions.
The bill amends the legislation to enable deductions to be made from income support payments where a recipient has a debt raised against them because of payments made through financial case management that need to be recovered.(13)
Concerns about this measure have been raised in submissions to the Senate Committee(14) because:
The other changes made by the Bill appear to be minor or technical.
Item 2 broadens the definition of officer in section 4 of the Disability Services Act 1986 to include employees of private-sector providers of rehabilitation services.
Item 4 inserts new subsection 19(3) which provides that the secretary may enter into an arrangement for the provision of rehabilitation services with a provider who does not have a current certificate of compliance if the provider is likely to have such a certificate within 12 months.
Item 5 repeals existing section 20 and substitutes new section 20. New subsection 20(1) contains the main change: the removal of the requirement that rehabilitation programs need to be individually approved under the Disability Services Act 1986.
Item 6 inserts new subsection 21A(1AA) which provides that a person undertaking rehabilitation as a participation requirement under the Social Security Act may not have the option to cease rehabilitation on request.
Items 21 and 28 deal with Pensioner Education Supplement eligibility for people moving from Disability Support Pension to Newstart or Youth Allowance.
Item 50 adds new subsection 1228(3) to the Social Security Act 1991 concerning the recovery of Financial Case Management debts.
Hon. Dr. Sharman Stone, Minister for Workplace Participation, More Choice for People Undergoing Rehabilitation, media release, 18 May 2006, http://mediacentre.dewr.gov.au/mediacentre/MinisterStone/Releases/MoreChoiceForPeopleUndergoingRehabilitation.htm
Hon. Dr. Sharman Stone, Minister for Workplace Participation, Industry Alert for Vocational Rehabilitation Services, media release, 27 June 2006, http://mediacentre.dewr.gov.au/mediacentre/MinisterStone/Releases/IndustryAlertforVocationalRehabilitationServices.htm
Hon. Dr. Sharman Stone, Minister for Workplace Participation, Release
of Exposure Draft of Purchasing Arrangements for Vocational Rehabilitation
Services 2007–2009, media release, 11 August 2006, http://mediacentre.dewr.gov.au/mediacentre/MinisterStone/Releases/ReleaseofExposureDraftof
PurchasingArrangementsforVocationalRehabilitationServices20072009.htm
Hon. Dr. Sharman Stone, Minister for Workplace Participation, Request
for Tender for Vocational Rehabilitation Services, media release,
27 September 2006, http://mediacentre.dewr.gov.au/mediacentre/MinisterStone/Releases/
RequestforTenderforVocationalRehabilitationServices.htm
Hon. Dr. Sharman Stone, Minister for Workplace Participation, Release of Exposure Draft of Purchasing Arrangements for Vocational Rehabilitation Services 2007–2009, media release, 11 August 2006.
Department of Employment and Workplace Relations, Information Session on the Request for Tender for Vocational Rehabilitation Services 2007–2009, October 2006, slide 15, http://www.workplace.gov.au/NR/rdonlyres/2630D503-3124-4364-877D-DEF362C1D6DF/0/VRSRFTPresentation.pdf
ibid., slide 31.
Department of Employment and Workplace Relations, Submission to
the Inquiry into the Employment and
Workplace Relations Amendment (Welfare to Work and Vocational
Rehabilitation Services) Bill 2006, p. 3,
http://www.aph.gov.au/Senate/committee/eet_ctte/wr_workchoices06/submissions/sub07.pdf
Australian Federation of Disability Organisations, Submission to the Inquiry into the Employment and Workplace Relations Amendment (Welfare to Work and Vocational Rehabilitation Services) Bill 2006, p. 1, http://www.aph.gov.au/Senate/committee/eet_ctte/wr_workchoices06/submissions/Sub01.pdf
ibid., p. 2.
Community and Public Sector Union, Submission to the Inquiry into
the Employment and Workplace Relations Amendment (Welfare to Work
and Vocational Rehabilitation Services) Bill 2006, p. 3,
http://www.aph.gov.au/Senate/committee/eet_ctte/wr_workchoices06/submissions/Sub06.pdf
ibid.
See submissions to the Inquiry into the Employment and Workplace Relations Amendment (Welfare to Work and Vocational Rehabilitation Services) Bill 2006 from ACOSS, the National Welfare Rights Network and Catholic Social Services, http://www.aph.gov.au/Senate/committee/eet_ctte/wr_workchoices06/submissions/sublist.htm
Department of Employment and Workplace Relations, Submission to
the Inquiry into the Employment and
Workplace Relations Amendment (Welfare to Work and Vocational
Rehabilitation Services) Bill 2006, pp. 6–7.
See submissions to the Inquiry into the Employment and Workplace Relations Amendment (Welfare to Work and Vocational Rehabilitation Services) Bill 2006 from ACOSS, the National Welfare Rights Network and Catholic Social Services, http://www.aph.gov.au/Senate/committee/eet_ctte/wr_workchoices06/submissions/sublist.htm
This paper has been prepared to support the work of the Australian Parliament using information available at the time of production. The views expressed do not reflect an official position of the Parliamentary Library, nor do they constitute professional legal opinion.
ISSN 1328-8091
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Published by the Parliamentary Library, 2007.